European Union leaders had to acknowledge that a second 109 billion euro bailout created by Europe and the International Monetary Fund in July has failed to solve the debt crisis. They must now spend the next six weeks seeking to boost the bailout fund, the European Financial Stability Facility (EFSF), by nearly 5 times it current size. Currently the EFSF can make as much as 440 billion euros, or $600 billion, in loans to troubled nations and banks. On Saturday, Olli Rehn, the European Union’s monetary affairs commissioner, said that there is “increasing political will” among European leaders to address the fears of investors and increase the bailout fund, so that it can insure a few trillion euros in loans.

US Treasury Secretary Timothy F. Geithner said in a statement on Saturday that “the threat of cascading default, bank runs and catastrophic risk must be taken off the table, as otherwise it will undermine all other efforts, both within Europe and globally.” The Obama administration has been putting the pressure on Europe, especially Germany — Obama has met or spoken with chancellor Angela Merkel 28 times since he has been in office — to intensify efforts to prevent contagion from Greece’s debt crisis spreading to the other weaker eurozone economies of Italy, Ireland, Portugal and Spain. On Sunday, Merkel spoke of erecting a “barrier” around Greece so that, as she said, “we can in fact let a state go insolvent” if it can’t pay its bills

Continued instability in Europe might undo not only the “fragile,” sputtering US economy but Obama’s re-election prospects if investors, watching one European country’s economy after another fall under its debt burden, hastily pull out their holdings and set off a credit crisis like the collapse of Lehman Brothers — only on a global scale.

Growing Economic, Political, Societal Crisis in Greece

But investors remain deeply unsure if even these measures can save Greece from default. Greece’s debt is $360 billion, totaling 150 percent of the country’s GDP and 5 times that of Argentina which defaulted on $95 billion of debt in 2001.

The Greek government has implemented stringent austerity measures, cut pensions and salaries and raised taxes, but, more and more, Greeks are feeling that “there is no light at the end of the tunnel, no source of hope,” says Dr Thanos Dokos, who directs the Athens think tank Eliamep. Both the suicide and the crime rate have risen in Greece while the average household income has fallen by 50 percent; unemployment is at 16 percent, and it’s higher for those in their 20′s. Greece’s economy is set to contract in 2012 for a fourth year in a row and analysts predict Greece’s debt burden could rise to 190 percent of its GDP by next year. Last week, Athens announced that it would lay off 50,000 public sector workers and reduce salaries and pensions further:

“The belt is now at the eighth notch, it’s become so tight there are only two more left, but nothing has improved,” said Georgios Valsamis, a young taxi driver who joined a barrage of strikes that brought public transport to a halt last week. “People in power, MPs, they’re like robots, they do whatever those foreigners [the EU, ECB and IMF] say. We are no longer willing to be a laboratory for failed policies. Low-income earners, those who have been really hit, can’t endure much more.”

That ordinary Greeks, among Europe’s lowest wage earners before the crisis erupted, are being stretched to breaking point is too obvious to ignore. When austerity was first introduced, after the newly elected socialist government discovered the budget deficit to be three times higher than the outgoing conservatives claimed, families took the blow by reining in spending and tucking into savings.

Faced with no prospects for years to come, young Greek are returning to rural villages or leaving the country in the largest numbers since the 1960s. Psychology professor Fotini Tsalikoglou says that “Greeks feel like they are in a bad dream. You wake up not knowing what will be overturned today or what was overturned yesterday.”

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TARP was done by W and paulson. President Obama invited the repubs to work with Democrats on the health care bill. Production and jobs were outsourced before President Obama took office. Unemployment was just starting to take off when President Obama was elected. President Obama's financial advisers (I've already stated they were inept) missed the boat on the depth of the recession at first thinking it was going down as a typical recession with a typical recovery. Wrong! In Greece there are not enough workers making enough money to support the government, the public, the retirees, and the military. Added to their low revenue and high spending was/is an unwillingness to make the rich pay their fair share in taxes. (Sound familiar?) I rest my case. I can only talk to a brick wall so long before it becomes boring!

@Keevin S, - Continued -
Nobody had read the whole thing before the Democrats violated congressional protocol to ramrod the bill through. And that was done even though 72% of the population was against passing the bill. So much for the Democrats standing for the wishes of the citizens wishes.

The only jobs issues Obama has been interested in is huge increased in tax revenues, and spending Trillions more to pay back the unions for their campaign contributions support, by creating temporary jobs for union workers only, when union workers make up only about 10% of the total work force. Government created jobs is NOT the way to resolve our economic problems. There is NOTHING that even remotely would suggest Obama's policies would bring unemployment down below 9%, and Obama has admitted that.
You mean Obama should get the same support as the Democrat party of NO, and all of the leftists on Care2 were giving George Bush when he was President? Or is it that you only expect full support by all parties because Obama is in office? That one sided expectation of support just won't happen like you want it. You're right it's not a good situation for the nation, but that's the way it's been going for decades. and the biggest problem with Greece is too big a government, paying themselves too much money and giving themselves to many benefits that the public sector workers (tax payers) can't afford to keep supporting. That won't work, and the same situation is happening

@Keevin S,
What was all set up before Obama was elected? Do you remember the promises Obama made to the country if he were elected? He promised the unemployment rate would never get over 8%, and he would heal the economy. How did Obama have one or both hands tied behind his back when he took office? He had total control of both houses of Congress and could have done anything he wanted during the first two years he was in office. He chose to go after passing his health care plan and help pay back his biggest campaign supporters on Wall Street by bailing them out of the financial problems they had created. Instead he should have been working on getting our creating legislation that would have encouraged new businesses to start and old existing businesses to grow, and return their outsourced production and services jobs back to the US. He refused to do that, and is still refusing to do anything about it. His massive give away of hundreds of Billions of our tax dollars to temporary jobs and green energy startup companies that just happen to be run by some of Obama's biggest campaign bundlers, is no way to improve the economy.

How can you work with someone on a health plan that nobody knew anything about? That whole health care bill that had been drafted entirely behind closed doors, keeping the Republicans from having any input on the bill? NOBODY knew what was included in the health care bill. Nobody had read the whole thing before the Democrats violated congressi

Don I.-You forgot to mention that this was all set up before President Obama was elected. I use the analogy of a 100 story skyscraper with a fire on each floor. President Obama has been fighting the repubs on trying to put out the fires. The repubs know the longer the fires burn the more blame President Obama gets. IF the repubs had worked with the Democrats the health care bill (a better one) would have been passed in 3-4 months then with bipartisan support the economy and jobs issues could have been taken care of in about six months. And by now the unemployment rate could have been down to about 7-8%. Still high but much better than the current 9%. It's not like President Obama had one hand tied behind his back, he had both hands tied behind his back because of the party of NO. If you are going to have a President of the United States you either support him or not. Remember, a majority elected him and a minority is stopping him. Not a good situation for the nation. At the risk of repeating myself Greece has too few and underpaid workers trying to support about 60% of the population. That won't work! To top it off the government has been unable or unwilling to collect the taxes from the rich. This is the close to the same situation happening her in America.

@Keevin S,
You forgot to mention we also have a very incompetent President and administration leading our country.

If Greece followed Obama and his administrations, way of thinking, and economice, they would be guaranteed of even higher national debt, and more failure. Greece had grown their government too big, gave gov't employees too many benefits, paid them too much money, and promised them way too much once the retired from their gov't positions.

The same thing has been happening in the US. The government has become way too large, and has way too many department and agencies who are allowed to create their own regulations, when all legislation is supposed to be created by Congress. Legislators and federal civilian employees being paid 40-60% migher wages than the average private sector employees, Giving them benefits that are far better than those given in the private sector, Legislators being given their FULL wages for the rest of their lives after leaving Congress, etc, etc. NO government can remain successful when run is such a way.

Greece government employees who have been receiving such lucrative wages and benifits from the government should have their wages and benefits packages cut in half, and the number of government should be trimmed down dramatically. Every penney of savings from that move should be directed to paying down their national debt.

Money shouldn't be given to anyone without working for it. If people receive benefits from the government, they should be made to work for the government to earn the money. The jobs could include anything from picking garbace along the states highways, filing paperwork, providing child care for other people who are working, and a number of other jobs that would help the community and statee. Our government should not be allowed to bail any failing company out. The business either make it or breaks it with the use of their own resources and money. If they can't make it on their own, they need to go under.

"Here in this country we have an idiot as the Federal Reserve Chairman and a tax evader as Treasury Secretary. All they know how to do is cut interest rates and print money, both of which has ruined our monetary system."

Throw in Greenspan and you have a triumvirate of imcompetence, arrogance, and hubris. Then there is Summers who hasn't a clue but a lot of book learning. It is not a different issue. It stems from the rich getting richer by avoiding or just plain not paying taxes pushing the burden onto the workers. Fewer workers making smaller and/or stagnant wages mean lower revenues and the spending continues upward crushing the government's budget. It's an exaggerated spending problem along with lower revenue that is entirely the problem.

To Keevin S.- Whether you like it or not, the fact of the matter is that Roger B. is correct. You seem to be addressing a totally DIFFERENT issue. I agree with you that the disparity between the rich and poor in this country has become ridiculous, however, that is another story and has no bearing on Greece's defaulting on its obligations. Here in this country we have an idiot as the Federal Reserve Chairman and a tax evader as Treasury Secretary. All they know how to do is cut interest rates and print money, both of which has ruined our monetary system. The problems in the U.S. are different E.U.'s problems. Despite the U.S. being the LARGEST DEBTOR NATION in the world, we continue to give billions of dollars to other countries with our freshly printed money, which only exacerbates the problem. If we're going to print money, it should be done for the sole benefit of U.S. citizens for things like Social Security and Medicare.

As they say "You ain't seen nothing yet." If you think it's bad now just wait and over time we will be in or near a depression. I'm afraid nothing is going to happen to help the economy and job situation before the election. President Obama has some good ideas but the house won't pass anything he wants despite the majority of people siding with the President. That takes us up to the 2012 election. One of two events will occur: 1. The people will finally wise up and vote a strong Democrat majority so reelected President Obama can tackle the economy and strong growth along with jobs will follow. 2. The repubs add to their gains and take the senate along with the house. (And I will be sick if President Obama loses!) The repubs with their false belief in a voter mandate will further cripple both the economy in the U.S. and around the world leading us into a depression or very close to one. Just to point out the obvious the gap between haves and havenots will widen leading to very probable riots in the U.S. and more around the world.
Reminds me of history when we studied the Dark Ages. We are possibly about to enter a new Dark Age.